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KPMG’s Week in Tax: 23-27 November

23-27 November 2015

The UK Chancellor of the Exchequer on 25 November 2015 delivered the Autumn Statement, and as in prior years, this year’s Autumn Statement included tax-related announcements. Among the items presented this year are proposals for a 60% penalty on arrangements successfully challenged under the anti-abuse rule and reductions to the rate of corporation tax, proposed to phase down eventually to 18% effective from 2020.

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Now that the Autumn Statement has been presented, draft clauses for next year’s Finance Bill release (the next stage in the UK’s tax policy cycle) will be published on Wednesday 9 December 2015—two weeks after this week’s Autumn Statement.

Other news

Other news reported this week included the following developments.

Luxembourg-France: A Protocol to amend the existing income tax treaty may not be effective until 2017.

Belgium: The Belgian tax authorities have decided to postpone to April 2016, a requirement that “legal persons” acting as directors are subject to value added tax (VAT) on their directors’ fees.

Italy: The Italian Supreme Court overturned decisions of lower courts to conclude that two renowned Italian fashion designers were not guilty of tax evasion. The high court’s action is viewed as a landmark decision because it sets out principles for application of criminal penalties in tax avoidance cases, and signals a change from the court’s previous position.

Netherlands: An opinion of the Advocate General in a test case pending before the Dutch Supreme Court concludes the “crisis levy” (an assessment imposed on employers for salaries exceeding €150,000 in 2012 and 2013) violates certain provisions of EU law. If the Supreme Court follows the Advocate General’s Opinion, this could—in some situations—provide opportunities for refunds of a portion of the crisis levy for those employers that had filed a notice of objection against the crisis levy.

China: The customs authority issued guidance that departs from traditional customs’ administrative models for write-offs, and provides for a “work order write-off” model for processing trade enterprises.

Japan-Taiwan: An agreement for the avoidance of double taxation was signed on 26 November 2015.

Singapore: The Inland Revenue Authority of Singapore issued guidance addressing the income tax treatment of gains derived from the disposal of investments of insurers.

OECD: The Organisation for Economic Cooperation and Development (OECD) released annual statistics on the mutual agreement procedure (MAP) caseloads of all its member countries and of non-OECD economies that agree to provide such statistics for the 2014 reporting period.

United States: Congressional tax-writing committees announced hearings relating to the OECD’s BEPS project, with the hearings scheduled next week on Tuesday.

United States: The Pennsylvania Commonwealth Court held that the net operating loss (NOL) deduction limit, as in effect in 2007, violated the “Uniformity Clause” of the Pennsylvania Constitution as applied to the taxpayer. The court concluded that the appropriate remedy was to allow the taxpayer to apply an uncapped NOL deduction and to refund the tax paid as a result of the unconstitutional cap.

United States: The City of Chicago Department of Finance released guidance addressing application of the city’s “personal property lease transaction tax” to various non-possessory computer leases.

FATCA developments

United States: The IRS issued a release announcing an upgrade to the FATCA online registration system.

Spain: Spanish guidance establishes the requirements: (1) to identify the tax residence of persons holding or controlling certain financial accounts; and (2) to report that information within the context of mutual assistance.

Read these and other items reported this week on the TaxNewsFlashwebpages.

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